- Oil is set to post a second weekly decline
- WTI rose above $85/Bbl this morning but is still down about 1% this week after reaching its lowest since January
- The market weighs that consumption may suffer as central banks raise interest rates and China adheres to its Covid Zero strategy
- Energy Secretary Granholm said yesterday that the Biden administration is considering releasing more U.S. SPR once the present program of 1 MMBbl/d expires in October (BBG, Reuters)
- She added that Biden’s administration is looking for strategies to prevent an anticipated rise in oil price later this year
- The following release is being considered since European sanctions will go into effect in December and because the EU is mulling a price cap on Russian crude, which might drive up prices even further
- Since March, the SPR has released 173.8 MMBbl in total, reducing the SPR stocks to below 450 MMBbl
- Granholm also said that the administration has not ruled out a ban on U.S. gasoline exports, but it is “certainly not something on top of the list” as the U.S. and its allies continue to explore a price cap on Russian oil
- Fed Chair Powell said yesterday that the Fed is “strongly committed” to combating inflation but is optimistic that it can be done without “very high social costs” (Reuters)
- Many analysts anticipate a larger 75-basis point increase in the interest rates
- This could act as a bearish factor on oil prices as rising interest rates could limit economic activity and thus cut fuel demand growth